Airbnb hosts will now have an easier way to set prices for their rentals.
The company is making available a "Smart pricing" tool that automatically sets rates based on current supply and demand. The tool, which was announced during the company's Airbnb Open event Thursday, is available now to the platform's hosts.
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The tool is an extension of the price tips feature introduced earlier this year. Price tips offered suggestions for hosts about when they should raise or lower prices to increase the number of bookings, based on previous trends, but required people to manually adjust the rates.
Smart pricing takes the feature a step further by fully automating the process.
It's like a customizable version of Uber's surge pricing: Hosts select a minimum and maximum price they want to charge for their listing (the feature will also offer a suggested range), and whether they want to host as often as possible or only occasionally.
It is also more similar to how a hotel would price rooms, factoring in market demand instead of keeping nightly rates flat.
Once enabled, smart pricing will automatically adjust the rates to maximize both the number of bookings and the total revenue.
Behind the scenes, the smart pricing tool takes a wide range of factors into account when adjusting the price. The exact location of the unit, the time of year, local events, as well as historical supply and demand data, are all weighed to determine the ideal price for any given day.
The company says that although some people may prefer to always charge a flat rate, smart pricing better reflects the dynamics of local markets, which can fluctuate depending on the time of year and other factors like local events.
If you frequently rent out you apartment in Austin, Texas, for instance, the model would automatically adjust during the annual South by Southwest conference to reflect the (extremely) increased demand.
Airbnb says that hosts using price tips, which rolled out in June, have on average seen a 13% increase in revenue.
Switching to the more streamlined automated process stands to increase this rate further, a move that would be beneficial to the bottom line for both hosts and Airbnb.